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8-K - FORM 8-K - MSA Safety Incd303806d8k.htm

Exhibit 99.1

 

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FROM:    MSA (Mine Safety Appliances Company)
   Ticker: MSA (NYSE)
   Contact: Mark Deasy – (724) 741-8570

FOR IMMEDIATE RELEASE

MSA Reports Record Sales

Quarterly Sales Increase 7% While Earnings Increase 44%

Full-Year Sales Increase 20% While Earnings Increase 83%

PITTSBURGH, February 15, 2012 – MSA (NYSE: MSA) today announced that net sales for the year ended December 31, 2011 were a record $1.173 billion compared with $977 million in 2010, an increase of $196 million, or 20 percent. Net income for the year ended December 31, 2011 was $70 million, or $1.91 per basic share, an increase of $32 million, or 83 percent, compared with $38 million, or $1.06 per basic share, for 2010. Excluding after-tax restructuring charges of $6 million and currency exchange losses of $2 million, net income for the year ended December 31, 2011 was $78 million, or $2.13 per basic share.

Net sales for the fourth quarter of 2011 were a record $304 million compared with $285 million for the same quarter in 2010, an increase of $19 million, or 7 percent. Net income for the fourth quarter of 2011 was $17 million, or 46 cents per basic share, an increase of $5 million, or 44 percent, compared with $12 million, or 33 cents per basic share, for the same quarter last year. Excluding after-tax restructuring charges of $2 million and currency exchange losses of $1 million, net income was $20 million, or 54 cents per basic share, for the fourth quarter of 2011.

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“MSA’s consolidated fourth quarter results reflect our continued focus on leveraging the strengths of our core product lines in both developed and emerging markets, combined with our effectiveness in executing our strategy,” said William M. Lambert, MSA President and CEO. “For the quarter, we achieved strong results across several of our core product groups throughout the world. In particular, gas detection products performed well in both developed and emerging markets, growing 12 percent in the quarter. The 14 percent growth we saw in self-contained breathing apparatus (SCBA) sales was also very encouraging. Additionally, we were pleased with the 200 basis point improvement we achieved in gross profit margin in the quarter. Our focus on growing sales of core MSA products, combined with our ongoing efforts to drive operational excellence and manage manufacturing costs, helped us achieve solid growth in revenues and profitability throughout 2011 while facing challenging economic conditions in many parts of the world,” he said.

For the quarter, sales in the company’s North American segment increased $13 million, or 9 percent, when compared to the same period of 2010. Sales of gas detection products increased $7 million while sales of head, eye and face protection products increased $3 million on higher shipments to core industrial markets. Shipments of ballistic helmets to the military market increased $9 million compared to the fourth quarter of 2010. These increases were partially offset by declines of $3 million in both gas mask and ballistic vest sales to military markets.

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Sales in the company’s European segment decreased $1 million, or 2 percent, in the fourth quarter of 2011. Currency translation effects decreased fourth quarter European segment sales, when stated in U.S. dollars, by $0.5 million, primarily due to a weaker euro. Local currency sales of gas masks and fire helmets decreased $2 million and $3 million, respectively, on weakness in Western Europe. These declines were offset by local currency sales of SCBA, which were up $5 million on higher shipments to the fire service markets in Eastern Europe and the Middle East.

For the quarter, sales in MSA’s International segment, which consists of Asia, Australia, Latin America, and Sub-Saharan Africa, increased $7 million, or 10 percent, when compared to the fourth quarter of 2010. Local currency sales increased $9 million, driven primarily by stronger industrial market sales in Latin America and Asia across a broad group of product lines. Currency translation effects decreased fourth quarter International segment sales, when stated in U.S. dollars, by $2 million, primarily related to a weakening of the South African rand and Brazilian real.

Net income in MSA’s North American segment in the fourth quarter of 2011 decreased 2 percent when compared with the fourth quarter of 2010. Strong improvements in operating income were more than offset by a higher effective tax rate.

European segment net income increased $2 million in the fourth quarter of 2011. This increase was primarily related to improved gross profits and lower operating costs, partially offset by higher restructuring costs.

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Net income in MSA’s International segment was $3 million higher in the fourth quarter of 2011. This increase in net income was primarily related to higher sales throughout Latin America and Asia, and the recognition of $2 million in deferred tax assets on higher profitability in Asia. These improvements were partially offset by higher operating costs on the higher level of sales.

“The revenue and earnings growth we have reported over the past several quarters demonstrate how our global team is effectively executing our Corporate Strategy,” Mr. Lambert said. “While I am pleased by the underlying performance seen in many areas of our business throughout 2011, we continue to keep a close eye on evolving global economic conditions. We remain optimistic regarding a strengthening U.S. economy and growing economies in the emerging markets of the world. However, we expect uncertain economic conditions to persist in Europe throughout 2012. In spite of this unevenness, we remain focused on executing our strategy, which clearly helped us recognize record revenues and strong improvements in profitability throughout 2011,” Mr. Lambert concluded.

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About MSA:

Established in 1914, MSA is a global leader in the development, manufacture and supply of safety products that protect people’s health and safety. Many MSA products typically integrate a combination of electronics, mechanical systems and advanced materials to protect users against hazardous or life-threatening situations. The company’s comprehensive line of products is used by workers around the world in a broad range of industries, including the fire service, the oil, gas and petrochemical industry, construction, mining and utilities, as well as the military. Principal products include self-contained breathing apparatus, handheld gas detection instruments, fixed gas and flame detection systems, head protection products, fall protection devices and thermal imaging cameras. The company also provides a broad range of consumer and contractor safety products through a joint venture with MCR Safety. These products are marketed and sold under the Safety Works® brand. MSA has annual sales of approximately $1 billion, manufacturing operations in the United States, Europe, Asia and Latin America, and 42 international locations. Additional information is available on the company’s Web site at www.MSAsafety.com. Information on Safety Works products can be found at www.SafetyWorks.com.

Cautionary Statement Regarding Forward-Looking Statements:

Except for historical information, certain matters discussed in this press release may be forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements, including without limitation all projections and anticipated levels of future performance, involve risks, uncertainties and other factors that may cause our actual results to differ materially from those discussed herein. Actual results can be affected by any number of factors, many of which are outside of management’s control. Among the factors that could cause such differences are global economic conditions, spending patterns of government agencies, competitive pressures, product liability claims, the success of new product introductions, currency exchange rate fluctuations, the identification and successful integration of acquisitions and the risks of doing business in foreign countries. These risks, uncertainties and other factors are detailed from time-to-time in our filings with the United States Securities and Exchange Commission (“SEC”). You are strongly urged to review all such filings for a more detailed discussion of such risks and uncertainties. MSA’s SEC filings are readily obtainable at no charge at www.sec.gov, as well as on a number of other commercial Websites.

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Mine Safety Appliances Company

Consolidated Condensed Statement of Income (Unaudited)

(In thousands, except earnings per share)

 

     Three Months Ended
December 31
    Year Ended
December 31
 
     2011      2010     2011     2010  

Net sales

   $ 303,754       $ 285,005      $ 1,173,227      $ 976,631   

Other income

     1,028         3,678        5,381        6,037   
  

 

 

    

 

 

   

 

 

   

 

 

 
     304,782         288,683        1,178,608        982,668   
  

 

 

    

 

 

   

 

 

   

 

 

 

Cost of products sold

     183,812         178,264        702,991        606,532   

Selling, general and administrative

     78,985         78,935        306,367        262,940   

Research and development

     9,599         8,828        39,245        32,784   

Restructuring and other charges

     2,441         2,612        8,559        14,121   

Interest

     3,694         3,796        14,117        8,707   

Currency exchange losses

     1,525         325        2,511        235   
  

 

 

    

 

 

   

 

 

   

 

 

 
     280,056         272,760        1,073,790        925,319   
  

 

 

    

 

 

   

 

 

   

 

 

 

Income before income taxes

     24,726         15,923        104,818        57,349   

Provision for income taxes

     7,839         3,903        34,773        18,290   
  

 

 

    

 

 

   

 

 

   

 

 

 

Net income

     16,887         12,020        70,045        39,059   

Net loss (income) attributable to noncontrolling interests

     92         (252     (193     (955
  

 

 

    

 

 

   

 

 

   

 

 

 

Net income attributable to Mine Safety Appliances Company

     16,979         11,768        69,852        38,104   
  

 

 

    

 

 

   

 

 

   

 

 

 

Basic earnings per share

   $ .46       $ .33      $ 1.91      $ 1.06   
  

 

 

    

 

 

   

 

 

   

 

 

 

Diluted earnings per share

   $ .46       $ .32      $ 1.87      $ 1.05   
  

 

 

    

 

 

   

 

 

   

 

 

 

Dividends per common share

   $ .26       $ .25      $ 1.03      $ .99   
  

 

 

    

 

 

   

 

 

   

 

 

 

Basic shares outstanding

     36,265         35,685        36,221        35,880   

Diluted shares outstanding

     36,874         36,587        36,831        36,422   

 

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Mine Safety Appliances Company

Consolidated Condensed Balance Sheet (Unaudited)

(In thousands)

 

     December 31,
2011
     December 31,
2010
 

Current assets

     

Cash and cash equivalents

   $ 59,938       $ 59,760   

Trade receivables, net

     192,627         198,551   

Inventories

     141,475         150,581   

Other current assets

     64,809         68,497   
  

 

 

    

 

 

 

Total current assets

     458,849         477,389   

Property, net

     145,763         156,789   

Prepaid pension cost

     58,075         121,631   

Goodwill

     259,084         263,089   

Other noncurrent assets

     193,281         178,290   
  

 

 

    

 

 

 

Total

     1,115,052         1,197,188   
  

 

 

    

 

 

 

Current liabilities

     

Notes payable and current portion of long-term debt

   $ 8,263       $ 10,163   

Accounts payable

     50,208         58,460   

Other current liabilities

     113,299         113,118   
  

 

 

    

 

 

 

Total current liabilities

     171,770         181,741   

Long-term debt

     334,046         367,094   

Pensions and other employee benefits

     124,310         126,479   

Deferred tax liabilities

     30,458         49,177   

Other noncurrent liabilities

     15,057         16,647   

Equity

     439,411         456,050   
  

 

 

    

 

 

 

Total

     1,115,052         1,197,188   
  

 

 

    

 

 

 

 

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Mine Safety Appliances Company

Segment Information (Unaudited)

(In thousands)

 

     Three Months Ended
December 31
    Year Ended
December 31
 
     2011     2010     2011     2010  

Net sales

        

North America

   $ 148,986      $ 136,209      $ 561,140      $ 464,012   

Europe

     75,350        76,538        286,753        251,107   

International

     79,418        72,258        325,334        261,512   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total

     303,754        285,005        1,173,227        976,631   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss)

        

North America

   $ 13,141      $ 13,427      $ 57,914      $ 44,560   

Europe

     1,791        112        7,331        (5,371

International

     6,643        4,108        27,152        15,835   

Reconciling

     (4,596     (5,879     (22,545     (16,920
  

 

 

   

 

 

   

 

 

   

 

 

 

Total

     16,979        11,768        69,852        38,104   
  

 

 

   

 

 

   

 

 

   

 

 

 

 

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